United States Shipping Board Emergency Fleet Corp. v. Levensaler

• Decision Date: 04 June 1923
• Docket Number: 3913.
• Citation: 290 F. 297
• Parties: UNITED STATES SHIPPING BOARD EMERGENCY FLEET CORPORATION v. LEVENSALER et al.
• Court: U.S. Court of Appeals — District of Columbia Circuit

290 F. 297

UNITED STATES SHIPPING BOARD EMERGENCY FLEET CORPORATION v. LEVENSALER et al.

No. 3913.

United States Court of Appeals, District of Columbia.

June 4, 1923

Submitted May 1, 1923.

Appeal from the Supreme Court of the District of Columbia. [Copyrighted Material Omitted]

Peyton Gordon and Vernon E. West, both of Washington, D.C., for appellant.

J Harry Covington, Spencer Gordon, and Newell W. Ellison, all of Washington, D.C., for appellees.

Before SMYTH, Chief Justice, ROBB, Associate Justice, and SMITH Judge of the United States Court of Customs Appeals.

SMYTH Chief Justice.

Levensaler and others, partners, under the name of W. D. Sheldon & Co., instituted an action in the Supreme Court of the District of Columbia against the Shipping Board Emergency Fleet Corporation to recover damages alleged to have resulted from a failure of the Shipping Board to perform a contract to load and transport a quantity of barley. A demurrer to the declaration having been overruled, the defendant pleaded that it had never promised and was not indebted as alleged. Issue was joined upon the pleas, and the case proceeded to trial before a jury, which resulted in a verdict for the plaintiffs, on which judgment was entered.

The declaration charged that on June 30, 1919, plaintiffs entered into a written contract with the defendant, whereby the latter promised to ship by steamer for the plaintiffs a quantity of barley to England from New Orleans, 'shipment as required, by steamer, but not later than July 20,' same year; that the plaintiffs at all times from June 30 had the barley for shipment, and that the defendant failed to furnish the steamer until September 23, 1919; that it was the general practice at the time in question for shippers of grain from the United States to England to draw on the purchasers of cargoes for the purchase price in pounds sterling, and as soon as the goods were shipped to sell such drafts, with the bills of lading attached, to banks in the United States; that the practice was necessarily known, or should have been known, to all persons engaged in the carriage of ocean cargoes, including the defendant; that fluctuations in exchange had been common since the outbreak of the Great War; that it was known to the defendant, or should have been reasonably contemplated by it, that a delay in the shipment of plaintiffs' barley would result, in all probability, in a change in value of the pound sterling, and that the plaintiffs would, because of this delay, receive as the price of their merchandise less in dollars than they would have received had there been no delay. The declaration further averred that, immediately upon the receipt from the defendant of the documents issued upon the barley then in the defendant's steamer, the plaintiffs drew upon the purchasers for the purchase price, payable in pounds sterling, and sold the drafts, with the documents attached, to bankers, and that on July 21, 1919, the value of the pound sterling in American money was considerably higher than on September 23, 1919, when the barley was loaded.

There is no direct allegation that the barley was sold. The only thing said with respect to that is that 'the plaintiffs drew upon the purchasers. ' The contract of sale, if there was one, is not set out either in terms or effect; but, assuming that there was a sale, it does not appear that the purchaser refused to accept the barley and pay the price agreed upon. Defendant settled with plaintiffs for the charges which the latter paid for storing the barley, and for loss of interest on the purchase price of the cargo during the delay, and the only thing the plaintiffs now seek to recover is for the loss sustained in consequence of the drop in the rate of exchange.

At the request of the plaintiffs the court, after having referred to the contract of affreightment, the drawing on the purchasers of the grain, the fluctuations in the value of the pound sterling, the knowledge of such fluctuations by persons engaged in the carriage of ocean cargoes, and the loss sustained by the plaintiffs by reason of the drop in the rate of exchange, charged the jury that, if they found that the practice mentioned was a general one, 'followed by a large proportion of the shippers of grain from ports in the United States to England during the period in question; that it was a practice which was generally known to persons engaged in the carriage of ocean cargoes, and which was known, or should have been known, to the officers and agents of the defendant engaged in such business; that it was known to the agents of the defendant engaged in such business, or should have been reasonably contemplated by them, that a delay in the shipment of the plaintiffs' goods would result in a delay in the sale of a draft drawn upon England, and would, in all probability, result in a change in the value in dollars of the pound sterling, so that in actual result the plaintiffs would, because of the delay, receive as the price of their merchandise less dollars than they would have received had there been no delay; and that the practice of selling grain in England for pounds sterling was so general that this loss was equivalent to a decline in the market price of the merchandise, even though you find that there were other methods of financing shipments of grain in use during the period in question--then unless you find for the defendant under instruction No. 5 granted in its behalf, you should give a verdict in favor of the plaintiffs,' etc. Instruction No. 5 has no bearing on the question we are now considering.

We must assume that the jury found that those facts existed, for they returned a verdict for the plaintiffs. Without reference to whether or not the testimony warranted them in doing so, were the facts sufficient to establish that there was a practice upon the subject, within the meaning of the law, among the grain shippers. The word 'practice' is a synonym for 'usage' and 'custom,' and it is so treated generally in the law books, though there is a distinction between a usage and a custom. A lawful custom is a part of the common law, while a lawful usage, 'proved and shown to affect both parties, may be described as the law of their case. ' Nicoll v. Pittsvein Coal Co. (C.C.A.) 269 F. 968, 971, citing Williston on Contracts, Sec. 648. But what the plaintiffs are insisting upon here is a trade usage or custom, and it is governed by the law applicable to that subject. We therefore come to consider what elements are necessary to a valid usage of trade.

The Supreme Court of the United States, speaking of a usage as it relates to banks, said:

'But, to constitute a usage, it must apply to a place, rather than to a particular bank. It must be the rule of all the banks of the place, or it cannot, consistently, be called a usage. ' Adams v. Otterback, 15 How. 538, 545 (14 L.Ed. 805).

Before a custom or usage can acquire the force of law, it must appear that it is general and uniform in the business to be affected by it, and that it has been peaceably acquiesced in without dispute for a long period of time. Southern Indiana Express Co. v. United States Express Co. (C.C.) 88 F. 659, 664. A custom must be general among the dealers. Oelricks et al. v. Ford, 23 How. 49, 61, 16 L.Ed 534. If the proof leaves the custom uncertain, either as to the fact or as to its effect on the matter with which it is related, it is void as a custom. It must be certainly shown to be...